credit rating

Finance, lease, subsribe or buy — here’s what you need to before you jump in.

2018 Buick Enclave Premier.

New car leasing is similar to renting a car, but in this case your rental term lasts for two, three or more years. You never own the car you lease and if you end your lease early or exceed the allotted miles, you will pay some costly penalties.

With these things in mind, why would anyone want to lease a new car? For several reasons, including:

1), you want to drive a more expensive car,

2), drive a new car every few years or

3) you simply don’t have much cash to plunk down for a down payment.

If you fall under any of these three reasons, then leasing’s appeal may be strong for you.

Just like buying a car, you should do your research to find the vehicle you want and the best leasing deal possible. Leasing deals are negotiable—you’ll want to put out the least amount of cash up front while limiting your monthly lease payments.

2018 Mazda CX-5 Grand Touring.

1. Know your credit score.

If you have a good credit, then a high credit score should provide you the best leasing deal. Obtain your credit score from at least one of the three credit reporting bureaus — Equifax, TransUnion and Experian — to see where you stand. A score of 700 and higher reflects “good credit management” according to Experian.

2. Choose your car.

Find the type of vehicle you want and narrow your list to about three models, each of which you should test drive. Buy the car you know you’ll be happy with for the next several years. If you settle for something that you’ll tire of quickly, you’ll either be stuck with a car you dislike until the end of the lease term or be forced to pay hundreds, perhaps thousands, of dollars to break your lease.

3. Compare lease deals.

Most leasing plans are offered through your new car dealer, although arranging a lease privately is possible. Avoid being pressured by any dealer offering a “take it or leave it” deal on auto leasing—shop several dealers for the best terms.

4. Negotiate the price first.

Consider not telling the new car sales person that you want to lease your vehicle until after you negotiate your best price. Your lease is based on the final agreed upon price, so try to lower that price to hold down your overall costs and reduce your monthly payments. You can find out what a dealer paid for the car by buying a new car price report from Consumer Reports and using that information to negotiate.

5. Calculate your lease.

Before signing your lease agreement, you must calculate your costs; use a lease calculator such as one found on leaseguide.com. Your negotiated price is your base capitalization cost, which should be lower than the car’s sticker price. Be mindful of other costs including acquisition fees, a luxury tax, state sales tax and lease insurance. Adjust this figure by the amount of money you put down and any trade-in credit. Your dealer has a residual value in mind, which is what the manufacturer determines what your car will be worth at the end of lease term. In addition, leasing companies use a “money factor” or interest rate to determine costs—include that number and your term (months) to determine total lease costs and your monthly payment.

Take Your Time

New car leasing sounds complicated, doesn’t it? That’s why you should take your time to come up with the best deal to find the car you’ll be happy driving for several years. If you rush the process, you’ll pay hundreds, perhaps thousands of dollars more on your lease.

You may not have reviewed your car insurance until the day that you took delivery of a new car or added a driver to your policy. Surprisingly, you find yourself faced with a minor crisis, one that you were wondering how you will meet the added cost. Indeed, it may have come in at a much higher rate than what you had anticipated.

Fortunately, there are sensible ways for you to trim your car insurance costs. We will review seven of them.

1. Perform comparison shopping. The best way to save on car insurance is to comparison shop. Auto insurance premiums can vary by hundreds of dollars amongst providers for the same coverage. So, obtain several quotes, then call your current insurer and ask for the company to match the lowest rate. If they can’t or won’t budge, then switch.

2. Know your credit rating. Your credit rating can impact your insurance premium. Insurers develop a credit-based insurance score and utilize that three-digit number to establish your rate. Your scores are ultimately based on your credit reports — if the information about you is wrong or negative, it can lower your score. Obtain copies of all three credit reports (i.e., Experian, TransUnion and Equifax) by visiting AnnualCreditReport.com. In fact, you are entitled to one free copy of each company’s report annually.

3. Find package discounts. You may be entitled to car insurance discounts, but you don’t even know it. For example, discounts are routinely dispensed to customers who have more than one vehicle insured. Additionally, you can obtain discounts by having the same insurer bundle your homeowner’s insurance policy. Moreover, insurers offer discounts to customers based on their age, military service, superior grades for students, and whether your car has certain types of safety and security equipment.

4. Take a driver training course. Drivers who have one or two tickets and have had that information reported to their insurance company pay a premium for their insurance. However, if you complete an authorized driver training program, your state may eliminate points, saving you money on your car insurance. For example, in Florida drivers may take an approved course no more than once per year and no more than five times in a lifetime. But that course may only be helpful if you have multiple non-criminal driving offenses within a short time, such as in 18 months. “In the event of things like an accident, there is no point in opting for driver school (unless the person already has a problem with points on his or her license) as the accident will be known to the insurer and will be surcharged, regardless of no offense being shown on the driver’s motor vehicle record. Also, if multiple offenses occurred in conjunction with the accident in question, there is no need to take school other than for points on the license,” explained Kristofer R. Kirchen, President, Advanced Insurance Managers, LLC in Tampa. In any case it is at the discretion of your insurer what benefit is derived from a driver training program.

5. Review your accident reports. If you have been in an accident or have points on your record, that information may be working against you. Contact your state’s Department of Motor Vehicles (DMV) and review your driving record. In particular, outdated or wrong information should be identified and removed from your report and an updated copy offered to your insurance company.

6. Raise your deductibles. How much skin do you have in with your car insurance? In other words, how high are your deductibles? The higher the deductible, the greater your share of the insurance risk. When you select a higher deductible, your insurer will lower your rates. So, determine whether the higher deductible is a sufficient risk to offset your potential losses.

7. Claim your car pooling discount. Only a small number of people car pool, but if you regularly trade off driving with at least one other person who drives hit or her own car, then your insurance company may lower your rate. In particular, your insurer may offer a carpool discount based on lower annual miles driven each year.

Saving Money on Car Insurance

Even if you haven’t added a driver or changed cars recently, a once annual review of your car insurance policy can save you money. With this in mind, examine your two recent policies. If you notice an increase that is greater than the cost of living, then contact your insurer.

And if you are planning to buy a new car or add a driver, contact your insurer for rate quote information first. As a result of that conversation, you may find yourself reconsidering your purchase or asking your insurer for a student discount.